Course Objectives

The purpose of this workshop is to identify the key analytic, structuring and restructuring lessons to be learned from deteriorating / failed credits. This is a highly interactive workshop where case studies and exercises are used to reinforce key learning points of the workshop.

Specifically participants will be equipped to:

Understand the role of covenants in credit management and crisis situations

Understand the process for managing exposures to a company in distress

Discuss the business and operational decisions required in order to place its business on a more solid foundation

Assess the available options to lenders / investors, compare likely recovery against other alternatives and the current market price of the company's debt, where applicable

Target Audience

Credit risk managers, bond and mezzanine and equity investors, lending bankers, and other finance professionals working in credit risk management and problem loan areas, including restructuring, work-outs and special care units.

Content

DEBT STRUCTURE

Introduction / revisit the four-step analytical approach and evaluate the strengths and weaknesses of debt structures in protecting lenders / investors when a company reaches crisis point.

Purpose: identify the borrower and where the assets and cash flow are

Risks: macro, sector, business and financial, management and owners

Debt profile: amount, currency, tenor, drawdown and repayment

Ranking: legal, structural, and effective

Covenants: predictive qualities of standard leverage loan covenants

Credit pricing and recovery rates.

Illustration Case Study:

Purpose and payback.

CRISIS MANAGEMENT

Managing exposures to a company in distress: the short term crisis management and the medium term business revisions required to manage the situation.

Triggers to distress

Covenant breach

Liquidity crunch / Refinancing difficulty

Insolvent trading:

Defining insolvency

Jurisdictional considerations

Exercise: Covenant breach and actions taken

Managing crisis

Management response to covenant breaches

Exercise: Exchange offers

Options for lenders

Potential parties to a restructuring

Appointment of external advisors

Cash management

Majority decision issues

Establish and certify the company's going concern status

Legal framework

Insolvency regimes

Responsibility of directors

Recovery rates

US models: Chapter 11 (reorganisation) and Chapter 7 (liquidation)

Exercise: Impact of Chapter 11 on Global companies

Overview of EU Insolvency Regulation

Establishing centre of main interest (COMI) and secondary proceedings

Summary of insolvency procedures in UK, Germany, France, Spain

Exercise: Jurisdiction selection for insolvency proceedings.

REMEDIAL BUSINESS PLAN

Evaluate the key business and operational decisions required by the company in order to place the business on a more solid foundation.

Cram down rights: forcing confirmation of a plan over the objections of dissenting classes e.g. shareholders with voting rights.

FINAL CASE STUDY:

Participants will work in groups to apply the key concepts learned during the two-day workshop and apply these to a real restructuring situation.

Workshop Times

Below are typical timings for our courses; upon registration we shall advise you if these have changed.Breakfast: 8.30amCourse Start: 9.00amCourse End: 5.00pmLunch: starts between 12.30pm and 1.00pm, and lasts no longer than 1 hour.Short breaks: 10-15 minutes are taken mid morning and mid afternoon.

The majority of Fitch Learning programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience on the course page for more details.

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